John Erickson on a roll

John Erickson has a Southwest Airlines business model for senior housing aimed directly at the middle market.

Once in the middle-income market, we wanted to be the very best provider there was--with more services, more activities, more involvement at the community level. We took the goal of excellence and delivering value and put those two pieces together and as a result, we got the broadest market share of any company in the country.

The two things that drove that success was the 100% refundable entry deposit, which is very attractive to the middle-income market. The other feature was that if you have a basic service package that covers the way people are currently living--main meal, transportation, utilities, all those things--for the same price or less than the cost of living in their own home and yet, if they need it, there is home health support, assisted living, comprehensive nursing or physical therapy all on the campus, then it becomes a decision that people can make more rationally.

Can you incorporate wellness by design?

His Erickson Retirement Communities certainly try to and can boast  that only 1 in 13 residents will need nursing home care, far better than the average of 1 in 4 Americans.

He and his wife recently gave $5 million to fund the Erickson School for Aging Studies at UMBC (University of Maryland, Baltimore County) that he wants to become a feeder for new hires into the Social Security Administration, Medicare and Medicaid. 

Timing is essential because he thinks we will have a massive crisis on our hands in 15 years when boomers start needing elder services unless there is an "army of qualified people."

John Erickson is on a roll.

Erickson, who is CEO of Baltimore-based Erickson Retirement Communities, has big plans. Currently operating 13 projects, he expects to go on a building spree in the next five years that will raise his total number of developments to 40. Erickson started his private company in 1983, scrambling to finance the first senior project. But in the past several years, he has assembled a collection of finance sources, including banks and investment houses such as Morgan Stanley.

Such sophisticated lenders have become convinced that Erickson will benefit from growing markets. Part of what inspires confidence is that Erickson's veteran projects have waiting lists of customers eager to buy. A development in Baltimore currently boasts a list with 1,300 names. “There is a huge demand for the products that we build,” says Erickson.